39% of Americans Say Car Ownership Is Unaffordable as Insurance Costs Jump 37.5%
Updated
Updated · USA TODAY · May 18
39% of Americans Say Car Ownership Is Unaffordable as Insurance Costs Jump 37.5%
4 articles · Updated · USA TODAY · May 18
Nearly 4 in 10 Americans surveyed by LendingTree said owning a car is now a luxury they cannot afford, with rising loan payments, insurance, gas and maintenance driving the squeeze.
Insurance costs have climbed 37.5% since 2021, outpacing 23.9% income growth; annual costs now average $7,275 for loan payments, $2,277 for insurance, $2,105 for gas and $1,184 for maintenance.
Auto-loan holders spend about 15% of household income on car costs—$12,841 a year on a median income of $85,759—matching the federal benchmark for being transportation cost-burdened.
Louisiana borrowers face the heaviest strain at 23.2% of income, ahead of Mississippi at 21.5% and New Mexico at 19.8%, while Massachusetts is lowest at 10.6%.
Affordability pressures are already changing behavior: 21% of shoppers delayed a purchase, 16% chose a cheaper vehicle, 13% kept their car longer and some are stretching loans to seven years despite higher long-term risk.
Is the American dream of car ownership now a financial nightmare for the middle class?
Will expensive EV repairs and high depreciation create a new debt trap for car buyers?
As car costs rise, are we witnessing the slow death of America’s car-centric culture?
Car Ownership Becomes Unaffordable: The 2026 Cost Crisis and Its Impact on Americans
Overview
By mid-2026, the financial burden of car ownership in America has reached a critical point, as many drivers significantly underestimate the true annual costs involved. A dramatic surge in expenses—especially rising auto insurance premiums—has transformed car ownership from a basic necessity into an unattainable luxury for a growing segment of the population. Nearly a third of Americans now find auto insurance unaffordable, and these rising costs have already disrupted financial plans for many. As a result, consumers are feeling squeezed from multiple directions, making reliable, fuel-efficient, and affordable-to-insure vehicles a top priority for their next purchase.